Below is the text of John Major’s speech at the ERG Conference, held on Thursday 2nd July 1998.

JOHN MAJOR:

Introduction

When William Hague became Leader of the Conservative Party, I offered him my full support. I told him that if he ever needed my help, he had only to ask. If he asked for advice, I would offer it. If he wanted support, he would have it. But I never expected to deliver his speeches for him.

I know William is sorry not be with you this evening. He’s asked me to offer you his apologies and best wishes for a successful evening.

But William’s loss is my gain. It’s an unexpected pleasure to be amongst so many friends this evening.

Changing mood of politics

In just the last few weeks, I sense that the mood of British politics is beginning to change.

There is an arrogance about this Government that is very unattractive. It has a huge majority and enjoys tremendous goodwill, but it is in danger of squandering it.

I approve of some of the Government’s policies - as I should - since they were mine. I will support sensible policies. I am not interested in mindless Opposition. I believe it is right to put more money into the National Health Service, as we would have done. I simply observe that they may have the resources to do so, precisely because of the economic measures we took. The pity of it is that that may not be the case in the future, since they are beginning to dissipate the economic inheritance they received.

I will support expenditure where it is sensible, since the National Health Service belongs to all of us and is not just the political plaything of Labour. Nor is Parliament, which sometimes seems like a by-stander, as Ministers ignore it.

The Prime Minister - without discussion with other parties, or debate in Parliament - decided to answer PMQs only once a week. I answered twice a week for nearly seven years and I know how much less demanding it would have been to answer only once, even if the question time were longer.

The Chancellor prefers to ignore economic debate in Parliament - even though his policies are damaging the economy - to attend routine meetings in Europe. Last week he should have sent one of his junior Ministers to Europe. He has already placed interest rates beyond the scrutiny of the Commons and now he seems to wish to place himself beyond it as well.

It is all very well to appear on the Des O’Connor Show and the Richard and Judy sofa. But for senior Ministers, it should not replace rigorous debate in Parliament or on the media. It is not disrespectful to Mr O’Connor or Richard and Judy to say they should not be the main shop window for presenting the policies of an elected Government.

Call me old-fashioned if you will, but I would like to know more about how the Government will deal with the coming recession in manufacturing industry - a recession made in Downing Street that may be worsened by economic development in the Far East - and less about their views on football, the Spice Girls, Cool Britannia, the freedom of Deirdre from Coronation Street, or the people’s this or that.

I somehow cannot imagine Mr Gladstone, Mr Disraeli, Mr Attlee or Mr Churchill dumbing down politics in the way the present Government are doing.

I shall turn on another occasion to the ill-judged constitutional changes that the Government are proposing. But there is one constitutional point I do wish to touch upon this evening. That is the importance of Select Committees of the House of Commons.

Select Committees are not to be treated in a high-handed fashion. The Foreign Secretary is utterly wrong to refuse to release papers to the Select Committee on Foreign Affairs on the grounds that he has commissioned an internal inquiry, however distinguished the inquirer may be.

Mr Cook was among the first to demand public inquiries in the last Parliament. He should not be slippery now. He should be the last to hide information from Parliament. It is unethical. What happened to the Government’s wish for freedom of information? If Mr Cook has a public interest reason for secrecy, then so be it; but if so, let him tell us so.

Unless he does, he should tell the Select Committee all he knows and let them see all the papers he has. He should tell them who saw the papers, to whom they were copied, whether there was a Joint Intelligence Committee Report and to whom it went.

I make no judgement prematurely about all this, but the Select Committee should make a mature judgement and they must be given the information to do so. Parliament should not be bypassed by the Foreign Secretary, however large the Government majority might be.

So the mood is changing - not only because of their attitude, but because of their policies. We have had a sixth interest rate rise, pushing mortgages up again. There may be more on the way. Unemployment has just started to rise again. Taxes are up on pensions and savings. Why is an economy, in such good shape a year ago, beginning to run into difficulties?

Economy and business

Why is it that serious commentators are starting to dust off those 1970’s buzzwords - “stagflation” and “balance of payments crisis”?

Don’t misunderstand me. That strong economy has not all disappeared. Much of it is still doing well. The service side is still growing steadily. Services strong. Manufacturing weak. Rising inflation and the early signs of rising unemployment. That is why businesses are beginning to fear stagflation again.

The Chancellor’s policies have pushed up interest rates and raised the cost of borrowing. Sterling is up over DM3 again, piling extra pressure on exporters. Last week’s CBI figures on export orders for May and June were the worst for 15 years. No wonder manufacturers are finding life tough.

The last Conservative Government had many detractors, but we left the economy with the best set of prospects Britain has seen for generations. Low inflation. Falling unemployment. Low taxes on companies. Base rates at 6 per cent. Companies creating more jobs.

Labour promised so much. They got elected by reassuring hard-working people - people with their own small businesses and modest savings - that they would be safe under a Labour Government. People believed them. Now they’re not so sure.

Small businesses

Nor is it just big business and exporters who are under pressure. Small businesses are the real engine of growth. They find high interest rates even more difficult to bear. So it is doubly unfair that they are being singled out for extra taxes as a result of Gordon Brown’s tax-raising Budgets.

Take the decision to abolish retirement relief on Capital Gains Tax. Under the current system, a small businessman selling up to retire pays no tax on the first £250,000 of the proceeds. For many hard-working people, that is their nest-egg for their pensioner years.

But under proposals soon to be come law, retirement relief will be abolished and replaced by a tapered system of CGT. So businesses under £250,000 in value will now be liable to tax.

Perversely, the new system will mean lower tax for some larger businesses, but higher tax for small ones. It is no way to encourage people to work hard and build up their businesses. It is no way to boost the enterprise culture.

It is just one example of what I mean when I say the Government is putting our Golden Economic Legacy at risk.

Duty of Opposition

There are two great tasks for the Conservative Party in the year ahead. First, we have to mount effective opposition to the policy mistakes that the Government is making. As the impact of those mistakes starts to feed through in the form of higher interest rates and taxes, there will be plenty opportunities for us to do so.

Second, we must be confident about our prospects. This Government are not undefeatable. They obtained fewer votes in 1997 than we obtained in 1992. We have lost before and won again.

The Conservative Party has served our country in Government more often and longer and better than any other party in the history of British politics.